Luxembourg, GLF join forces to mainstream investments for sustainable land use and climate

The Grand Duchy of Luxembourg and the Global Landscapes Forum (GLF) are launching the Luxembourg-GLF Finance for Nature Platform – a partnership to expand the emerging market for global sustainable finance and to promote nature-based solutions to climate change, ecosystem degradation and biodiversity loss. The collaboration is initially planned for the period 2021‒2024 and has been launched in the context of the GLF Africa Digital Conference.

“Our aim is to mainstream and accelerate sustainable finance with a specific focus on nature-based solutions, climate change, ecosystem restoration, and biodiversity. That may sound aspirational but we believe the time is right and the finance community is ready,” says Carole Dieschbourg, the Minister for the Environment, Climate and Sustainable Development of the Grand Duchy of Luxembourg.

Sustainable finance is a burgeoning sector with significant growth prospects for environmental, social and governance (ESG) investments. Global ESG assets are expected to exceed $53 trillion by 2025, representing more than a third of projected total assets under management, according to Bloomberg data.

The Organisation for Economic Cooperation and Development estimates that almost $7 trillion a year is required up to 2030 to meet climate and development objectives.

By addressing nature’s multiple crises now, global investors can have a positive environmental and social impact, while also protecting their financial assets. Unsustainable land use has negative implications for climate change, biodiversity, water use, rural poverty and gender equality. These issues can lead to asset stranding, debt defaults and reduced returns across a wide range of asset classes, including corporate loans, public and private equity, and sovereign bonds.

The two partners are combining their respective strengths to unleash the power of sustainable finance for nature-based solutions on a global scale. GLF is the world’s largest knowledge-led platform on integrated land use. Luxembourg is a major financial hub that is poised to become a leader in natural capital investing. By leveraging the GLF and its charter members’ knowledge and best practices on sustainable land-use finance, key organizations in Luxembourg have the chance to shape a growing market for impact investments targeting sustainable land use and climate.

“This partnership is both welcome and timely as the world confronts a range of crises caused by unsustainable human activities,” says John Colmey, GLF managing director. “Together with the government of Luxembourg, GLF is helping recalibrate financial mechanisms to protect Earth as one interconnected landscape.”

Now in its eighth year, the GLF’s global digital media platforms have reached over 1 billion people in 185 countries via a core network of participants representing more than 7,800 organizations, governments, and youth, learning and knowledge programs. The GLF Investment Case, launched in 2015 and held in Luxembourg in 2019, is one of the leading platforms for sustainable finance. The government of Luxembourg can play an important role in rechanneling investment flows toward land-use models that are both sustainable and financially viable.

This approach is specially designed to address the needs of communities in low- and middle-income countries. In doing so, the partnership will contribute to achieving the United Nations’ Sustainable Development Goals, along with the climate objectives of the Paris Agreement and the UN’s REDD+ program to reduce emissions from deforestation and forest degradation in developing countries.

Activities implemented within the framework of the partnership include:

Preparing, jointly with Luxembourg partners, relevant knowledge management and communications initiatives

Planning and organizing physical, digital and blended events in Luxembourg (e.g. webinars, workshops and online conferences)

Helping key Luxembourg organizations to increase their engagement with sustainable finance for nature-based solutions to climate change with a particular focus on the Global South

Designing knowledge products jointly with Luxembourg-based organizations (e.g. publications, news articles and fact sheets), which can benefit multiple partners, in particular from low and middle income countries.

Luxembourg and the GLF have pooled their knowledge and resources several times in recent years. In 2019, the Grand Duchy hosted the fourth GLF Investment Case Symposium, which brought together almost 500 of the world’s leaders of sustainable finance institutions. The GLF and the Luxembourg Green Exchange – the world’s first platform dedicated exclusively to sustainable finance – also collaborated on a publication about green bonds and sustainable land-use investments last year.

The next GLF Investment Case Symposium will spotlight how forests, sustainable food systems and sustainable finance can accelerate action towards achieving the goals of the Paris Agreement. It will be held in Glasgow, alongside the United Nations Climate Change Conference (COP26), from 5-7 November, 2021.